Question

Merryland is a closed economy that produces and consumes only marshmallows and chocolates. In 2019, marshmallows cost $1 each, chocolates cost $2 each, and Merrylanders buy 10 marshmallows. In 2020, marshmallows cost $2, chocolates cost $1, and Merrylanders buy 10 chocolates. Consider 2019 as the base year wherein the consumer basket is fixed. If the government of Merryland determines that the typical consumer basket is composed of 3 marshmallows and 2 chocolates, what is the consumer price index in Merryland for 2019? 

1. 1. 1

   2. 3

   3. 5

   4. 7